Isra-Mart srl: Could Scots independence damage green energy investor confidence?

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Scotland's First Minister has downplayed concerns that his party's ambition for full independence could conflict with its hopes of delivering billions of pounds of renewable energy investments.

Citigroup yesterday published a report urging "extreme caution" over investing in Scotland's renewables energy sector, on the grounds the Scottish National Party's plans for a referendum on independence would create huge uncertainty at the same time when major decisions on green projects are needed.

The report also argued that an independent Scotland would be too small to generate the annual £4bn subsidy which could be initially required to drive the move to a low carbon economy.

"Continued subsidy from consumers in England and Wales would be required, but Scotland seceding from the UK would clearly place this subsidy stream at grave risk," it said.

"Renewable investors risk seeing their assets stranded in a newly independent Scotland."

However, First Minister Alex Salmond dismissed the concerns, telling the BBC that the analysis failed to take account of the export market.

"In order to get anywhere near the renewable energy obligations that London is going to have, England is going to have to have Scottish renewables from the sea," he said.

"Perhaps the reason why all these international companies are committing funds to Scotland is because in 10 years' time, without Scottish offshore wind power, then there would be a severe danger of the lights going off in England. I don't think anybody is going to want or allow that to happen.

"Believe me, in the modern world the ability to produce power is a great asset, not a liability."